June 14, 2017

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Users should take note that Instagram posts promoting a product may not always be properly labeled as a sponsored post.

Sure, Instagram has its own advertising option, but marketing from “influencer” profiles is a billion dollar industry. It’s also an industry that does not always follow the rules, according to a recent study from Mediakix. An analysis of Instagram’s 50 accounts with the most followers showed that only seven percent of the posts followed the Federal Trade Commission guidelines.

Tracking the top 50 accounts over the course of one month, 30 of which used sponsored posts, 93 percent did not appear to be compliant with the FTC guidelines. The organization says that whenever a post is the result of some sort of material connection — such as a free product or payment — the post must clearly be labeled as an advertisement. The FTC says both #ad and #sponsored as well as text labels like “sponsored by” are fine, but some brands use a less clear tag such as #sp. The label is also supposed to appear close to the post, not buried in the middle of a long list of hashtags.

The study only considered the top 50 Instagram influencers, a little over half which use sponsored posts. The profiles combined have 2.5 billion followers, seeing an average of 45 posts from each account every month. Around seven percent of those posts were sponsored, but the study showed out of that seven percent, 93 percent did not appear to be FTC-compliant.

The advertisers sponsoring the posts were largely made up by fashion brands at around 61 percent. Travel followed as the second biggest category, making up eight percent of sponsored posts, while food and drink, miscellaneous, apps, beauty, automotive and electronics are an even smaller piece of the pie.

“It’s easy to write off infractions as ‘just hashtags,’ but these disclosures may have profound and far-reaching effects on consumers and the influencer marketing industry,” Mediakix wrote. “Instagram and other social media platforms are seeing more activity from advertisers, which means that users’ feeds are seeing more native advertising and sponsored influencer content than ever before.”

The marketing company noted that earlier studies have shown that many users actually do not mind sponsored posts, particularly younger users.